2019 (11) TMI 1236

X X   X X   Extracts   X X   X X

Full Text of the Document

X X   X X   Extracts   X X   X X

.... related to the addition made by the Assessing Officer (AO) u/s 40A(3) of the Income Tax Act, 1961 (in short 'Act'). In this case, assessment was completed originally u/s 143(3) by an order dated 25.09.2007. Subsequently, the assessment was taken up for revision u/s 263 by Commissioner of Income Tax, Rajahmundry and found that the assessee has debited the amount of Rs. 53.62 lakhs towards site purchases in the P&L account for purchase of 6.39 acres of land from several parties vide two agreements dated 28.05.2004 and 03.06.2004 as per the details given below : (i)       Agreement dated 28.05.2004 Date Amount in Lakhs Mode of Payment 28.05.2004 4.00 Cash 08.09.2004 8.00 Cash 24.11.2004 3.74 Cash ....

X X   X X   Extracts   X X   X X

Full Text of the Document

X X   X X   Extracts   X X   X X

.... are no banks or whether payments were made on holidays and whether there was any need for making cash payments. (ii) To bring on record the agreement, if any between the assessee firm and Sri G.V.K.Chowdary in the light of the contentions made in the reply to the show cause letter issued to the assessee to revise the Assessment Order passed by the AO for assessment year 2005-06. (iii) To examine the applicability or otherwise of the decision of the Hon'ble Tribunal, Chennai B Bench (Income Tax Officer Vs. Smt. N.Padma) to the facts of the assessee's case. (iv) To examine whether the provisions of Sec.6DD applies to the facts of the case. (v) To bring on record if there is any agreement between the agent and the land owners rega....

X X   X X   Extracts   X X   X X

Full Text of the Document

X X   X X   Extracts   X X   X X

.... AO examined the explanation of the assessee and held that the entire payments were made to the land owners through agent is an afterthought and cannot be relied upon. The AO further viewed that since the endorsements were made on the reverse side of the agreement, the affidavit of Shri G.V.K.Chowdary is unreliable and against the facts. The contention of the assessee that the payments were not made to the landlords directly also is untenable. Therefore, the AO did not accept the contention of the assessee and further viewed that the decision relied upon by the assessee in the case of Smt.N.Padma by ITAT, Chennai Bench has no application and accordingly made the addition of Rs. 10,27,400/- u/s 40A(3) of the Act i.e. 20% of the expenditure o....

X X   X X   Extracts   X X   X X

Full Text of the Document

X X   X X   Extracts   X X   X X

.... the assessee's case is squarely covered by the decision of this Tribunal, hence, requested to set aside the orders of the Ld.CIT(A) and allow the appeal of the assessee. 5. On the other hand, the Ld.DR supported the orders of the lower authorities. 6. We have heard both the parties and perused the material placed on record. In the instant case, the contention of the assessee is that the assessee has appointed Shri G.V.K.Chowdary as an agent for procurement of the land, since the assessee was not having sufficient knowledge with regard to the local problems of the lands and the lands owners. The assessee further submitted that the assessee has made the cash payment to Shri G.V.K.Chowdary who was acting as an agent of the assessee firm and....